Euribor rise puts Spanish variable mortgages under fresh pressure

On 10 September, the European Central Bank raised its main rates by 25 basis points for the second time this year. The move pushed market expectations higher. Spanish borrowers felt the pressure quickly.

The Euribor is expected to close September at about 3.22%. That would be its highest average level since July 2024. For borrowers whose loans are reviewed once a year, the typical annual mortgage bill could rise by €828.

The increase came after the ECB lifted its key rates again. Markets are still weighing the chance of further rises.

For a €178,365 mortgage signed over 25 years with a one-point spread over the Euribor, the monthly payment would rise by €69 after an annual review. The yearly increase would reach €828.

Six-month reviews produce a different estimate. The payment would rise by €65 a month, or €780 over the half-year.

The pressure grows with the loan size.

A €300,000 mortgage under the same conditions would cost €115 more each month after an annual review. That adds €1,380 over a year.

For a six-month revision, the reported increase is €109 per month and €308 per semester.

September is a sharp change from August. The Euribor averaged 2.954% last month. A close near 3.22% would push costs higher for borrowers whose contracts use the index to reset their interest rate.

Public market estimates in the final days of September placed the preliminary average between roughly 3.202% and 3.251%. Those figures point to a result near 3.22%.

The ECB's decision took effect on 16 September. The deposit facility rate moved to 2.5%. The main refinancing operations rate reached 2.65%, while the marginal lending facility rate rose to 2.9%.

The deposit rate affects the Euribor, along with the cost of bank loans and credit cards. The index also reflects expectations about future monetary policy and the market cost of interbank funding, as the European Central Bank noted.

Christine Lagarde did not rule out more increases. The ECB president also declined to offer guidance on future decisions.

Markets now face an unclear path. Borrowing costs may stay high rather than return soon to cheaper levels.

Eurozone inflation reached 3.3% in August, according to the source material. It was the highest level since the start of the war in the Middle East.

Higher energy prices are feeding into transport and food costs. That has raised concern that the cost of living could climb further in the coming months.

Markets have not ruled out more ECB action. Officials may try to prevent a repeat of the inflation crisis that hit the region in 2022.

Josep Soler, founder and executive board member of EFPA España, links the Euribor's movement mainly to changing inflation expectations.

Ricardo Gulias, chief executive of mortgage intermediary RN Tu Solución Hipotecaria, says the latest 25-basis-point increase was largely expected. He says the new Euribor rise reflects a reassessment of how long eurozone rates may stay high.

The forecasts differ.

Gulias expects the Euribor to end 2026 between 3.2% and 3.5%. He points to uncertainty over energy prices, inflation and ECB decisions.

The panel assembled by Funcas takes a less severe view. It expects some moderation in the coming months, with the index ending the year near 2.7%.

For mortgage holders, the effect depends on the outstanding balance, the loan spread and how often the rate is reviewed. The September reading will not affect every borrower at the same time.

Banks use the reference month and review schedule set out in each mortgage contract. The timing matters.

Families due for a payment update will see eurozone inflation and tighter monetary policy appear in their monthly bills. Variable-rate borrowers remain directly exposed to decisions made in Frankfurt.

The cost reaches household budgets while the Euribor stays above its August average.